Singapore’s investment commitments in 2024 rose 6.3% to S$13.5 billion: EDB
But expected jobs creation, when the commitments are realised over the next five years, was lower at 18,700
SINGAPORE attracted some S$13.5 billion in fixed asset investment (FAI) commitments in 2024, over half of which were in electronics, Singapore’s Economic Development Board (EDB) said at its annual year in review on Thursday (Feb 6).
This is a 6.3 per cent increase from the S$12.7 billion secured in 2023, which represented a sharp fall from 2022. FAI refers to a company’s incremental capital investment in facilities, equipment and machinery.
Despite the increase in FAI, the commitments bring a lower projected contribution of S$23.5 billion in value-added per annum, compared with S$26.7 billion for commitments in 2023.
This indicator measures the direct contribution a company makes to Singapore’s gross domestic product, with wages and profit being major components.
EDB managing director Jacqueline Poh said 2024 was a challenging year as the external operating environment became increasingly complex, even as businesses benefited from falling interest rates.
“Unsure of where to invest, we noticed that many global companies chose to cut costs rather than take risks,” she said. “All of these factors did weigh on EDB’s efforts to attract investments.”
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The number of jobs expected to be created, when the commitments are realised over the next five years, also fell 6.7 per cent to 18,700. Almost two-thirds of these are expected to have a gross monthly wage above S$5,000.
Poh said the drop was “negligible”, and that the figure remains above EDB’s medium-term goal of 16,000 to 18,000 jobs.
She added that EDB’s main objective is to create “good jobs for Singaporeans”, rather than a large number of jobs that the country “might not even be able to fill”.
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Total business expenditure (TBE) per annum, which refers to a company’s incremental annual operating expenditure in Singapore, also dropped about 5.6 per cent to S$8.4 billion. This was driven by investments in headquarters and professional services.
New growth areas
A large majority of the investments were from the semiconductor, biopharmaceutical and medical technology industries. Investments from the electronics sector accounted for 57 per cent of FAI, with the quantum more than doubling to about S$7.7 billion.
“Companies across the semiconductor value chain situated greenfield and expansion projects here to diversify supply chains and respond to the recovery in global demand led by the surge in AI (artificial intelligence) applications,” EDB said.
In particular, Digital Industry Singapore secured 26 AI centres of excellence last year, from both digital native and industrial companies, to research and build proprietary generative AI solutions.
Biomedical manufacturing, which accounted for 16.5 per cent of FAI, also surged to about S$2.2 billion. EDB said this was a result of such manufacturers investing in facilities to target “high-growth segments”, such as precision therapy.
It noted that several precision medicine projects were secured, including AstraZeneca’s first end-to-end antibody drug conjugate manufacturing investment in Singapore, building new capabilities in innovative precision therapeutics for cancer treatment.
While the chemicals sector accounted for S$4.5 billion in FAI commitments in 2023, the amount fell to just S$366 million in 2024.
EDB chairman Png Cheong Boon said the swing between semiconductors and chemicals reflects the differences in long-term forecasts as well as immediate market concerns.
The semiconductor sector, he said, has a “more bullish forecast” driven by AI and digitalisation, whereas the chemicals industry has been suffering from excess supply in recent years, resulting in companies being more cautious with investments.
Asked if US chip export controls will affect Singapore’s semiconductor industry, Png said the Republic’s semiconductor plants are not manufacturing the specific products that the US has imposed restrictions on.
“But it doesn’t mean that in future, it will not be affected, so we are all watching this space quite carefully,” he said.
He added this was why EDB’s strategy is to diversify, such that it is not dependent on any one product, company or market.
In terms of geographical distribution, over half the firms that committed FAI last year were from the United States, while a quarter were from Europe.
Asked if the share of investments from the US would remain similar in 2025 against a backdrop of more potential tariffs, Png said it was “too early” to say, and that the share of investments across different countries tend to vary year on year.
Job creation
About 46 per cent of the jobs to be created will be in services projects. EDB noted that services jobs are being transformed as businesses prioritise environmental sustainability, supply chain resilience, AI, digitalisation and automation.
Manufacturing accounts for 37 per cent of jobs to be created, while the remaining 17 per cent are for roles in research and development (R&D) and innovation.
EDB said it enhanced initiatives to ensure that foreign investments benefit Singapore’s workforce and business ecosystem. For instance, it works with companies, training partners and industry associations to prepare workers for the new jobs created.
It is also ramping up efforts to nurture Singaporeans who can take on leadership positions in global companies, through development programmes such as the Singapore Leaders Network Fellowship.
Challenging environment
While EDB did not provide a projection for FAI commitments to be attracted in 2025, Png said the agency is aiming, as with previous years, to do better than its medium-term targets.
Last year, EDB said its medium-long-term goal for FAI was S$8 billion to S$10 billion, while that for TBE was S$5 billion to S$7 billion.
This is even as the agency expects the year ahead to “remain challenging”, amid geopolitical and macroeconomic uncertainty.
“Protectionist policies stemming from economic nationalism and trade frictions will weigh on companies’ investment decisions,” Poh said.
Increased competition for foreign investments from developed countries and regional hubs is prompting global companies to review their global footprints, she added.
Even so, Singapore is likely to continue benefiting from tailwinds arising from Asia’s growth. “The green transition and the growth of technologies such as AI and the need for supply chain reconfiguration... these will create stable and new growth opportunities for us,” she said.
EDB said it will partner existing players to transform, such as through working with global enterprises to harness AI, digitalisation and automation to improve productivity.
It also wants to strengthen the city-state as a global hub for startups and innovation. While focusing on anchoring high-value innovation projects from global companies, it also continues to attract global startups and founders, especially those in the technology and growth areas.
The agency added that it will work on deepening local ecosystem and regional collaborations to benefit companies, which includes nurturing more partnerships between multinational corporations, Singapore businesses and research institutions.
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